Rents lift for suburban retail property

Retail business strategies are continuing to evolve in the post-pandemic operating environment, says JLL in its latest market snapshot.

Tuesday, June 27th 2023

In the Auckland suburban retail sector, where many mum and dad investors have holdings, average prime rents rose by $25/m2 or 2.7% in the first quarter of this year after remaining unchanged since early 2021, and now stand at $950/m2.

Although vacancy is expected to drop, backfill of existing vacant space needs to be occupied, in order for rents to start increasing, so further increases are not expected this year. 

Another factor stabilising rents is many smaller scale retailers developing their online shopping platforms, and do not need additional retail space for their business to grow.

Suburban vacancy dropped to 9.4% from 11.9%, signifying more than 5,000m2 of space being leased in the first quarter across multiple locations.

On the supply side, 110m2 of retail space in a mixed-use property at 110 Carlton Gore Road was completed in the quarter.

Other developments are underway at Auckland Airport’s Manawa Bay, comprising 100 stores in the premium outlet shopping centre.

Then 10km down the road at Onehunga, Lendlease’s significant $100 million, 7,060m2 three-level retail development planned between Dress Smart and Onehunga Mall has been started.

These developments are expected to be completed by the end of 2025, which will add to the retail landscape.

Asset performance

After softening by 25bps at the end of last year, average net yields for prime and secondary suburban remained unchanged for the first quarter.

Prime and secondary stand at 6.63% and 9.25% respectively. Average net yields for shopping centres also remained unchanged, at 8.63%.

On the other hand, average net yields for bulk retail softened by 13bps to reach 7.75%.

This was the only retail sub-sector with a movement in yields for the first quarter, owing to investor interest in this asset class during last year.

Only one significant transaction for this market was concluded in the first quarter. A property at 9 Rose Road, Ponsonby sold for $8.1 million, at an initial yield of 4.20%.


No comments yet

Unity 6.99
Heartland Bank - Online 6.99
ICBC 7.05
SBS FirstHome Combo 7.05
China Construction Bank 7.09
Co-operative Bank - First Home Special 7.10
Wairarapa Building Society 7.15
Co-operative Bank - Owner Occ 7.30
Kiwibank Special 7.35
BNZ - Classic 7.35
TSB Special 7.39
China Construction Bank 6.75
Heartland Bank - Online 6.85
ICBC 6.85
Wairarapa Building Society 6.94
Unity 6.99
Westpac Special 6.99
Kiwibank Special 7.05
ASB Bank 7.05
BNZ - Classic 7.05
AIA - Go Home Loans 7.05
Co-operative Bank - Owner Occ 7.05
China Construction Bank 6.40
Westpac Special 6.49
ICBC 6.49
AIA - Go Home Loans 6.69
BNZ - Classic 6.75
ASB Bank 6.75
Kiwibank Special 6.79
SBS Bank Special 6.79
TSB Special 6.79
Co-operative Bank - Owner Occ 6.85
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Standard 8.40
Co-operative Bank - Owner Occ 8.40
Kiwibank 8.50
Kiwibank - Offset 8.50

More Stories

Apartment market takes a dive

Thursday, December 07th 2023

Apartment market takes a dive

Increasing constraints, including the cost and availability of credit, have meant a major slowdown in the apartment market. Consents dropped by 36% in the year to October – the lowest total since July 2017.

Auckland housing market rebounding

Wednesday, December 06th 2023

Auckland housing market rebounding

Wealthy Auckland buyers who can afford $2 million plus houses have returned to the market in force.

Tenant left with damages bill despite not being responsible

Tuesday, December 05th 2023

Tenant left with damages bill despite not being responsible

A woman who left a rented Manurewa, Auckland property she shared with her partner after discovering he was using methamphetamine is still liable for a half share of Tenancy Tribunal awarded exemplary damages and other debts owed to the landlord.

Private landlords should be included in bill – Property Brokers

Monday, December 04th 2023

Private landlords should be included in bill – Property Brokers

A big year is ahead for the property management industry.